What are Beautiful Assets?

Art is considered an alternative, risky kind of investment – art buyers are faced with many perils ranging from provenance uncertainty (difficulty proving the authenticity of a piece), to the intricacies of selling off works of art, to inadequate safekeeping conditions. One should understand that the art world is swarming with short-lived trends that make art an even riskier type of investment vehicle. The notion of beautiful asset is used to colloquially describe investments in art, with a particular focus on antiques and the visual arts.

Studies show that art has been growing in significance as an investment option. People choose to invest in works of art for a number of reasons – the primary one seems to be that the value of art investments is relatively stable and does not track stock market trends. Art is also a testament to one’s personal taste, identity, and distinction. The growing popularity of art investing is confirmed by market data. According to an art market report by Art Basel, artwork sales reached $64.1 million in 2019, a year-on-year increase of $3.6 million.[1] Painting is currently the most popular form of art among investors worldwide; the most favoured genres are Impressionism and Modernism.

Collectors keep asking themselves, “what is the right way to invest in art?” There is no clear-cut answer. It is best to pick assets consistent with one’s financial capabilities and personal preferences. Some critics believe art investing to be an absurd endeavour, implying that gold or securities would be much sounder choices. However, through smart collecting of art pieces that will be serving an educational function rather than gathering dust in storage for decades, everybody stands to gain – investors themselves, the artistic community, art institutions, and the general public.

Art is certainly an appealing financial asset for people of elevated socioeconomic standing. But it is not only the wealthy that can afford it. The state of the art market in Latvia is different from the global situation, where major auction houses and galleries sell millions’ worth of works by both contemporary and historically acclaimed artists. Where Latvia’s art market is accessible to any buyer, the international market boasts an enormous price range. The three great markets are currently Hong Kong, London and New York – each feeding into a vast network enabled by the World Wide Web’s spotting and auctioneering capabilities. Global trends are being set by major collectors, whose interests and preferences are served by scores of galleries, artists, and museums. The greatest issue in this art shark business is that works purchased for artificially inflated amounts are kept in tax havens and never exhibited.

The Signet Bank Art Collection was never treated as a mere investment – the pieces we purchase enrich a fastidiously curated selection of artwork that reflects the bank’s business philosophy and our drive to educate and inspire our clients, our staff, and society at large. We know that art can be an excellent alternative to traditional financial instruments, but it will always be more than a mere investment vehicle.

Art is not an investment. Art is something you buy because you are financially solvent enough to give yourself the pleasure of living with great works rather than having to just see them in museums. People who are buying art at the top of the market as an investment are foolish.

Arne Glimcher, a renowned art trader, founder of multiple art galleries, and owner of Pace

^{[1] Dr. Clare McAndrew, The Art Market 2019, (Basel, Switzerland: Art Basel and Zurich, Switzerland: UBS Group AG, 2019).}